April 22 (Bloomberg) -- New York Times Co. and McClatchy Co. plunged in New York trading after print advertising sales in the first quarter declined at both newspaper companies.
Print ad revenue dropped 12 percent at Times Co., owner of the New York Times, and fell 14 percent at McClatchy, publisher of the Miami Herald, according to statements today. The companies have pared jobs and news sections after industrywide advertising sales fell to their lowest levels since 1984 last year, according to Newspaper Association of America data.
McClatchy Chairman and Chief Executive Officer Gary Pruitt said in a conference call that ad sales will continue to decline this quarter. Gains in digital ad sales at the two publishers weren’t enough to counter the declines in print.
“Print ads are still down, and that’s a huge part of their revenue,” Ed Atorino, an analyst at Benchmark Co. in New York, said in a telephone interview. “There were some bright spots -- like digital -- but it’s a case of things just not being good enough.”
McClatchy, based in Sacramento, California, fell 75 cents, or 11 percent, to $6.08 at 4:05 p.m. in New York Stock Exchange composite trading, for the biggest single-day decline since Oct. 28. Times Co. slid 45 cents, or 3.5 percent, to $12.29, the largest one-day drop in more than two months.
Net income for Times Co. was $12.8 million, or 8 cents a share, compared with a loss of $74.5 million, or 52 cents, a year earlier, the New York-based publisher said in its statement. McClatchy posted net income of $2.2 million, or 3 cents, after losing $37.5 million, or 45 cents, a year earlier.
Revenue at Times Co. fell 3.2 percent to $587.9 million, compared with the $581.7 million average of three analysts’ estimates compiled by Bloomberg. Total ad sales dropped 6.1 percent as digital advertising gained 18 percent.
“Even though we expect advertising revenues to be down in the second quarter, we believe the ad trend will continue to improve,” McClatchy’s Pruitt said on a conference call.
Times Co. Chief Executive Officer Janet Robinson said in a conference call that she expected print advertising results to improve in this quarter compared with the first quarter and digital sales to be about unchanged on that basis. She didn’t provide details.
McClatchy’s revenue declined 8.2 percent to $335.6 million, on an 11 percent drop in ad sales. Digital advertising grew 2.2 percent.
Operating costs fell 18 percent to $535.2 million at Times Co. and 23 percent to $289 million at McClatchy.
Industrywide, digital ads account for about 10 percent of U.S. advertising sales, according to the Newspaper Association of America.
Times Co. is planning to sell an application for Apple Inc.’s iPad this year in addition to the free app currently available, said Robinson. A spokeswoman, Diane McNulty, declined in an e-mail to give details, such as pricing or timing.
Robinson said the company looked forward to competing with News Corp.’s Wall Street Journal for readers in the New York area. The Journal is introducing a separate New York news section on April 26.
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